Average order value (AOV) measures how much customers spend per transaction on average. It is one of the three levers of e-commerce revenue, alongside conversion rate and traffic volume:
Revenue = Traffic × Conversion Rate × AOV
A 10% increase in AOV has the same revenue impact as a 10% increase in conversion rate — with no additional traffic cost.
How to Calculate AOV
AOV = Total Revenue ÷ Number of Orders
If your store generated $120,000 from 3,000 orders last month:
AOV = $120,000 ÷ 3,000 = $40
Common AOV Optimization Tactics
| Tactic | Mechanism |
|---|---|
| Free shipping threshold | "Add $12 more for free shipping" prompts larger baskets |
| Product bundling | Pre-grouped items at a slight discount increase units per order |
| Upsells at checkout | Higher-tier or complementary products before payment |
| Cross-sells on product pages | "Frequently bought together" recommendations |
| Minimum order discounts | "10% off orders over $75" raises the floor |
| Post-purchase upsells | One-click add-ons immediately after checkout |
AOV vs. Revenue Per Visitor
AOV only counts completed purchases. Revenue per visitor (RPV) includes all visitors — buyers and non-buyers — making it a better single metric for A/B test primary metrics. A change that increases AOV but slightly decreases conversion rate can still be a net negative on RPV.
When running tests aimed at AOV improvement, always track RPV as the guardrail to ensure you're not sacrificing too many conversions for a higher ticket size.
Segmenting AOV
Average order value varies significantly by:
- Traffic source — Paid search buyers often spend differently than organic or email visitors
- Device — Mobile users frequently convert at lower AOV than desktop
- New vs. returning — Returning customers often have higher AOV due to brand familiarity
Segment your AOV analysis before assuming a site-wide average is representative.